Market Recon Black Friday

Good Morning,
                       If you read my note on Wednesday, then you know that I wasn’t really planning on writing a market note on Black Friday, but then I ended up reading an article in the paper this morning that required some comment on consumer behavior…so we here are.
                       Before we get back to business, if you are amongst those headed in today, there are a couple of things out there that you want to be cognizant of.  No, there will not be any macro, earnings or Fed speakers lurking about today, just peripheral (if you’re American) stuff…..but peripheral stuff you need in your head.  Chinese shares were hit with the ugly stick today, after it became clear that several large Chinese brokerage houses are under investigation for suspected violations.  Worst beating taken by the Shanghai Composite since that whole August bugaboo.  Other than that, European shares were strong yesterday, and have meandered into a northerly direction again today, as Mario Draghi and the ECB family singers warm up their vocal chords for next Thursday.
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The US Consumer
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                       I read in the paper this morning that the savings rate is at a multi-year high.  I read that Personal Income was up 0.4% m/m in October, and 0.2% in September, yet Consumer Spending plunders along, growing (just barely) at a 0.1% clip.  Those quoted in the article say things such as “Consumers have the wherewithal to spend, they just don’t want to”, and “We’ve certainly spent a lot of time here trying to understand the consumer,…it’s a bit of a mystery”.  Toward the end of the article, this one was my favorite “It appears as though many consumers are angry”
                      Is it really so hard to understand the dynamic at work here ??  It boils down to one very easy to understand concept.  The consumer is just plain uncomfortable.  Let me explain.  In my day, there were streets that you avoided when you walked to, and from school.  Why did you avoid them ??  …..Because you had tried walking down them at first, and either gotten roughed up, robbed, or both.  You learned how to not let that happen to yourself again.
                     Well, folks, many American consumers are simply trying to find a new way to get to and from school without getting beaten up.  They have already tried spending money that they didn’t have.  They have heard “You’ve got to have debt”  In short, they have been hurt.  Not to mention, that a whole lot of them work for whole lot less money than they used to.  They’re still out there, I promise.  Americans love stuff, and they will buy it, but A comes before B….and A is comfort level.  B is consumer spending.
                      For those quoted in the article….this is not hard stuff to understand.  You just have to leave your castle, and talk to people.  They are not just statistics.  You have to listen to them, and you have to hear them.
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Sarge out.
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Sarge’s TRADING LEVELS
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SPX: 2111, 2106, 2098, 2092, 2086, 2076, 2069
RUT: 1218, 1212, 1206, 1201, 1197, 1192, 1187